A surging dollar has swept past chart resistance and is heading toward its sharpest monthly gain in almost a year on Thursday, as traders bet on a strong U.S. economy propping up short-term interest rates and waited on key inflation data.<\/p>\n
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The\u00a0dollar\u00a0was on track to snap a three-session streak of gains on Thursday, after a flurry of\u00a0U.S. economic data that included a reading on inflation slightly \u200bdented expectations for rate hikes from \u200bthe\u00a0Federal Reserve\u00a0this year. <\/p>\n
The Commerce \u200bDepartment said the personal consumption expenditures price index<\/a> (PCE) surged 4.1% in the 12 months through May, the largest increase and first reading above 4.0% since\u00a0April 2023, but matching expectations of economists polled by Reuters.<\/p>\n On a month-over-month basis, the PCE index increased 0.4%, just below the 0.5% \u2060estimate.<\/p>\n Even with \u200cthe elevated inflation, consumer spending was unfazed, rising 0.7% in May, up \u2060from 0.4% in April and above the 0.6% estimate.<\/p>\n “The worst of inflation and consumer angst may be mostly behind us,” said\u00a0Brian Jacobsen, chief economist at Annex Wealth Management in\u00a0Menomonee Falls, Wisconsin.<\/p>\n “Inflation expectations are tied more to the price at the pump than the price of microchips and memory. As long as gasoline \u200cprices trend lower, inflation expectations will likely follow suit.”<\/p>\n The\u00a0dollar index<\/a>, which measures the greenback against a basket of currencies, fell 0.18% to 101.43, with the euro<\/a> up 0.08% at\u00a0$1.1366. The greenback had risen in the past three sessions \u200band five of the prior six as expectations for rate hikes from the Fed this year had grown, touching a 13-month peak on Wednesday.<\/p>\n Dollar\u00a0strength pushed gold briefly below\u00a0$4,000\u00a0an ounce for the first time in more than seven months and sent bitcoin under\u00a0$60,000\u00a0for the first time since 2024. <\/p>\n Markets are now pricing in a roughly 30% \u2060chance for a hike of at least 25 basis points at the central bank’s July meeting, down from 34.2% in the prior session, according to CME \u200cFedWatch<\/a>. For the September meeting, expectations for a hike dipped to 62.1% from 65.7% on \u200cWednesday.<\/p>\n GDP revised higher <\/p>\n Other data from the\u00a0Commerce Department\u00a0showed gross domestic product increased at an upwardly revised 2.1% annualized rate in the first quarter, up from the previously reported 1.6% pace, while consumer spending growth was cut to a 0.5% rate from the prior 1.4%. Data from the \u2060Labor Department showed weekly initial jobless claims fell by 12,000 to a seasonally adjusted 215,000, below the 225,000 forecast.<\/p>\n The British pound<\/a> strengthened \u20600.23% to\u00a0$1.3194, putting it on track to snap consecutive declines in the wake of the resignation of Prime \u2060Minister\u00a0Keir Starmer\u00a0on Monday.<\/p>\n